2016-17 Audit of the Office of Chief Inspector of …In 2016, the industry paid approximately...

2016‐17 AUDIT OF THE OFFICE OF CHIEFINSPECTOR OF MINES: TASMANIA

REPORT TO THE CHIEF EXECUTIVEOFFICER: WORKSAFE TASMANIA

Greg Rowan Rowan & Associates Pty Ltd 13 March 2017

i. consolidating the progress that has been made towards repairing the inadequacies

identified in previous reviews; ii. enhancing and maintaining the sustainability, capacity, capability and standing of the

OCIM; iii. identifying specific work method control practices and processes to increase efficiencies

and transparencies; and iv. identifying practical, tested and proven solutions for those matters requiring redress that

were identified during the conduct of this audit, or that remain outstanding from previous audits.

INTRODUCTION

Introduction Inquiries into fatalities at the Beaconsfield, Renison and Cornwall mines between 2000 and 2006, identified inadequacies in the resourcing and staffing levels within the Office of the Chief Inspector of Mines (OCIM). Following a review of the findings of these inquests, Workplace Standards Tasmania actioned a number of recommendations aimed at addressing these inadequacies. At the time, it was also recommended that ongoing audits be conducted into the capacity of the OCIM to continue to perform its functions.

The first of these audits was conducted in 2010 by Professor Michael Quinlan PhD, FSIA of the School of Organisation and Management at the University of New South Wales. Professor Quinlan conducted similar audits in 2012 and 2014.

In September 2016, WorkSafe Tasmania (WST), as it is now known, finalised its Terms of Reference (TOR) for the next audit of the OCIM and on 19 October 2016 engaged Greg Rowan of Rowan & Associates Pty Ltd to conduct the 2016‐17 audit. The TOR (included in this report as Appendix I) are principally focused on the practices, activities and procedures of the OCIM. As a consequence, the examination and reporting of the findings on these matters are process based.

It is, however, self‐evident that the purpose of any regulatory body is the attainment of the objectives of the legislation for which it is accountable. In the case of the OCIM this is the Mines Work Health and Safety (Supplementary Requirements) Act 2012 which states ‐

The object of this Act is to assist in securing the health and safety of mine workers, and other people exposed to risks to their health or safety arising from mining operations, through the implementation of health and safety measures, specific to mines and mining operations, that are in addition to the measures imposed under the Work Health and Safety Act 2012.

As such, the recommendations included in the report are framed with the specific strategic intent of improving the safety and health outcomes of all persons that may be impacted by mining operations. These recommendations are focused on ‐

Page 1 Strictly Private and Confidential

TABLE OF CONTENTS

Table of Contents Introduction _______________________________________________________________________ 1

Disclaimer_________________________________________________________________________ 4

Conduct of the Audit ________________________________________________________________ 5

The Tasmanian Mining & Resources Industry _____________________________________________ 6

Terms of Reference 1 ________________________________________________________________ 8

1. REVIEW OF FINANCIAL RESOURCING OF THE OCIM............................................................... 8

(a) the optimal use of the financial resources...................................................................... 8

(b) options for better aligning financial resources with industry activity ..........................14

(c) the remuneration qualifications and experience for staff of the OCIM .......................16

(d) arrangements for out‐of‐hours attendance..................................................................16

(e) improvements to Statement of Duties ......................................................................... 16

Terms of Reference 2 _______________________________________________________________ 19

2. REVIEW STRUCTURAL SUPPORT OF THE OCIM.....................................................................19

(a) the optimisation of current physical resources ............................................................19

Mine Record and Enforcement Management............................................................................20

Data, Information and Intelligence recoding analysis and reporting.........................................21

Minister Advisory Committee ....................................................................................................22

(b) the optimal organisation structure and strategic alignment of the OCIM....................23

(c) professional alignment and support for staff of the OCIM...........................................24

Regulatory Capture ....................................................................................................................24

Major Hazard Facilities...............................................................................................................25

(d) training needs and capability gaps................................................................................ 26


3. REVIEW INSPECTORATE ACTIVITIES ...................................................................................... 29

(a) the effectiveness and capability of inspectorate activities ...........................................29

Effectiveness ..............................................................................................................................29

Capability ...................................................................................................................................29

Activities ....................................................................................................................................30


TABLE OF CONTENTS

(b) the effectiveness and capability of reactive and pro‐active activities ..........................31

Pro‐active field activities............................................................................................................31

Reactive field activities ..............................................................................................................33

(c) investigation management and effectiveness ..............................................................34

(d) administrative functions undertaken by the OCIM.......................................................35


4. Arrangements in Other Jurisdictions .................................................................................... 37

(a) any existing anomalies .................................................................................................. 37

(b) arrangements in similar jurisdictions............................................................................ 37

(c) any financial, resourcing, or structural support issues .................................................39

Recommendations _________________________________________________________________ 40

Australian Business Excellence Framework ______________________________________________ 42

Appendix I Terms of Reference ____________________________________________________ 44

Appendix II Interviews and Site Visit Register _________________________________________ 45

Appendix III Contemporaneous Notes _______________________________________________ 50

Appendix IV References ___________________________________________________________ 56

Appendix V Recommendations of Previous Audits _____________________________________ 57

Appendix VI Mines Inspector Skill Matrix _____________________________________________ 72

Appendix VII About The Author _____________________________________________________ 74


DISCLAIMER

Disclaimer This report was prepared solely for the purpose set out herein and it is not intended for any other purpose or use.

The report is accurate to the best of our knowledge and belief but Rowan & Associates Pty Ltd cannot guarantee the completeness or accuracy of any descriptions or conclusions based on information supplied to it during the conduct of its work. Whilst all reasonable care has been taken in the preparation of the report, all responsibility is disclaimed for any loss or damage, including but not limited to that suffered by any party represented during the conduct of this review arising from the use of this report or suffered by any person for any reason whatsoever.

Acknowledgements I would like to personally thank all those who participated in this audit and who gave freely and openly of their time and expertise. Without such open cooperation and professionalism, the conduct and reporting of such reviews can be challenging and the opportunities for shared learning and positive action planning can be compromised.


CONDUCT OF THE AUDIT

Conduct of the Audit The audit was conducted through a series of site visits, structured interviews with key stakeholders and discussions with workers and other persons.

The site visits were conducted in conjunction with routine mine inspections to enable the practices and processes used by the inspectors in the conduct of their normal activities to be observed. As a former Senior Inspector of Mines, this provided the opportunity to assess the regulatory practices of the inspectors as they interacted with the management and workforce at the site.

Following the completion of the inspections, I attended the inspector’s de‐briefing with the Site Senior Officer (SSO) and others on the findings of the inspections. As a former Mine Manager and current holder of a First Class Mine Managers Certificate, this provided the opportunity to engage technically in the discussions of the hazards, risks and control strategies in place and to assess the technical interactions between the mine management and the inspectors.

Following the completion of these discussions, I invited the SSO and those others present, to participate in a structured interview seeking information and opinion on matters related to the Terms of Reference of this audit. All persons agreed to participate in these interviews and the full and honest disclosure provided is gratefully acknowledged.

In completing the audit a total of 45 interviews were conducted, 29 formal discussions were held with workers, tradesmen and others, 2 underground metalliferous, 1 underground coal mine, 1 open cut metalliferous mine, 7 quarries and 1 Major Hazard Facility (MHF) 1 were inspected.

All officers of the OCIM were interviewed and the three offices of the mines inspectorate in Burnie, Hobart and Launceston were attended.

Structured interviews were conducted with the Commissioner of Mine Safety, the Chief Inspector of Mines (Coal) and the Chief Inspector of Mines & Quarries in Queensland as well as the Chief Compliance Officer, the Director of Mine Safety Operations, the Chief Inspector of Mines, the Manager of the Audit and Investigation Unit and the Director of Mine Safety Performance in New South Wales.

Further structured interviews were held with worker representatives, industry groups and other key stakeholders. The list of interviews and site visits are included as Appendix II of this report.

1 Interviews, observations and discussions were recorded in a notebook maintained for the purpose.


THE TASMANIAN MINING & RESOURCES INDUSTRY The Tasmanian Mining & Resources Industry The value of the Mining and Mineral Resources sector to the Tasmanian economy is substantial. It is Tasmania's largest export industry representing approximately 56% of Tasmania’s total export income2 . In 2015–16, mineral products worth $1.61Billion were exported. Together with an addition $1.92Billion from non‐exported quarrying products and coal mining, the sector had an estimated total value of $3.53Billion.

In 2016, the industry paid approximately $23Million in royalties and directly employed approximately 4,850 personnel across 16 large and 315 smaller mines and quarries.

In relative terms, Tasmania’s second most valuable export industry is the food sector (dairy, fruit & vegetables, seafood and meat) with total products worth $702Million exported in 2015‐16.

Table 1 below provides a comparison of the indicative values of the Mining and Mineral Resources sectors in Queensland and New South Wales between 2010 and 2016.

State Total Value

p/a

Value in Exports

p/a

% Overall State Exports

Direct Employed

No of Large Mines

No of Large Quarries

Royalties Paid p/a

Tas $ 2B $ 1.7B 57% 4850 16 113 $ 22.9M

NSW $ 21B $ 17.1B 26% 38200 165 74 $ 1.3B

Qld $ 30B $ 27.6B 59% 39797 132 84 $ 2.1B

Table 1 Indicative Values of Minerals Resources Sectors by State

Historically, ‐ in 2012‐13 it accounted for $1.66Billion or more than 50% of total mercantile exports 3

in 2014‐15 mineral products worth $1.49Billion were exported representing approximately 57% of Tasmania’s export income4 and the total value of the Industry was $2.01Billion (in addition to the exported value including quarry production and minerals mined but not exported, e.g. coal production)7

as at September 2014 there were 554 mining leases, 149 exploration licenses, 30 retention licenses and two special exploration licenses active in Tasmania5

Major mining operations in Tasmania are conducted by Grange Resources, Minerals and Metals Group, Unity Mining, Copper Mines of Tasmania, Bluestone Mines, Tasmania Mines, Shree

2 www.cg.tas.gov.au The mining and mineral processing industry of Tasmania. A guide for Investors. August 2016 3 http://www.mrt.tas.gov.au/portal/mining 4 www.cg.tas.gov.au The mining and mineral processing industry of Tasmania. A guide for Investors. August 2016 5 www.cg.tas.gov.au Tasmania Delivers INVEST13004_TD_Mining_Minerals_En_20150616_Web


www.cg.tas.gov.auwww.cg.tas.gov.auhttp://www.mrt.tas.gov.au/portal/miningwww.cg.tas.gov.au

* Currently on care and maintenance

Figure 1 TASMANIAN MINES &PROCESSING FACILITIES

THE TASMANIAN MINING & RESOURCES INDUSTRY

Minerals, Cornwall Coal, Sibelco Lime, Cement Australia and Circular Head Dolomite. The state is home to the Nyrstar zinc refinery and projects aimed at producing sheelite and tin.

Metallic minerals mined include copper, gold, silver, iron, tungsten, tin and zinc with future opportunities in nickel and aluminium. Non‐metallic industrial minerals include ultra‐high purity silica flour, limestone and dolomite. Non‐metallic construction materials include building stone, aggregate, gravel and sand.

The coal mining sector consists of a single operator. Cornwall Coal is a wholly owned subsidiary of Cement Australia that operates an underground mine, a small open cut and a coal washing and processing plant. Its total production of approximately 400,000 tonnes/year is sold domestically, primarily to meet the requirements of Cement Australia’s Railton operation.

□. MINING OPERATIONS ○. MINERAL PROCESSING

1Copper Mines of Tasmania*: 13 Grange Resources: Iron ore pellets Copper, gold, silver

2 Unity Mining: Gold 14 Tasmanian Advanced Minerals: Silica flour

3 Minerals and Metals Group: Zinc, 17 Cement Australia: Cement lead, gold, silver, copper

4 Bluestone Mines: Tin, copper 18 BCD Resources: Gold

7 Tasmanian Advanced Minerals: 19 Pacific Aluminium: Primary Silica flour aluminium alloys, paste, powder

8 Grange Resources: Iron ore 19 TEMCO: Ferromanganese Silico‐manganese, sinter

9 Shree Minerals*: Iron ore 23 Nyrstar Smelter: Zinc metals, alloys, cadmium, sulphuric acid

10 Circular Head Dolomite: . MINES UNDER DEVELOPMENT Dolomite

12 Naracoopa Mineral Sands: Heavy 5 Avebury Nickel Mine: Nickel mineral sands

15 Tasmania Mines: Magnetite, 6 Venture Minerals: Tin, tungsten, tungsten iron ore

16 Sibelco Lime Tasmania: 11 King Island Scheelite: Tungsten Limestone

20 Cornwall Coal: Coal 22 Hard Rock Coal Mining: Coal

21 Webb Mining: Gold 24 Australian Bauxite: Aluminium


TERMS OF REFERENCE 1

Terms of Reference 1

1. REVIEW OF FINANCIAL RESOURCING OF THE OCIM(a) the op mal use of the financial resources of the inspectorate to maximise the impact

of regulatory ac vity

Regulatory activity should be directed towards attaining the stated objectives of the legislation it is charged with administering. In the case of the mines inspectorate, that is to ‐

… assist in securing the health and safety of mine workers, and other people exposed to risks to their health or safety arising from mining operations…6

It is the identification and effective targeting of those activities with the greatest potential to impact on the safety and health outcomes that presents the key ongoing challenge for regulators of all jurisdictions.

In performing its functions, there are a range of activities undertaken by mining regulators throughout Australia, including –

i. conducting audits, inspections and compliance activities;

ii. conducting investigations and taking appropriate enforcement actions;

iii. communicating, coaching and mentoring stakeholders on legislation changes,

industry trends and the findings from significant incidents (local, inter‐state and

international);

iv. conducting analysis on reported High Potential Incidents and underpinning trends

in causation analysis;

v. developing targeted action and intervention plans for specific high risk or high

consequence events;

vi. drafting, reviewing, improving and implementing legislative amendments;

vii. participation in committees, workshops, conferences and information forums;

viii. convening and participating in Safety and Health Advisory Committees;ix. working with inspectors from other jurisdictions, agencies and partners; and

x. providing advice to the Minister on mine health and safety matters.

Whilst in reality the regulator may be expected to fulfill all of these functions, its critical focus must remain on those activities that directly impact on the compliance and safety and health performance of the industry.

Examining the year‐on‐year expenditures of the OCIM, the greatest cost centre for the agency is salaries (refer Table 3). Determining the optimal use of the financial resources of the OCIM must therefore include an examination of its current staffing levels.

6 Mines Work Health and Safety (Supplementary Requirements) Act 2012, 3 Object of Act



As noted by Quinlan7 in his 2014 audit of the OCIM‐An adequately resourced inspectorate is essential to providing effective regulatory oversight of mine safety. Inadequate resourcing has been a contributory factor in a number of fatal incidents, including the Pike River mine disaster and a number of mine fatalities in Tasmania. Indeed, it is ‘pattern’ flaw that has been found repeatedly by investigations into serious mine incidents.

Table 2 details the numbers of inspectors working within the OCIM over the period 2009‐2016.

Year 2009 2010 2011 2012 2013 2014 2015 2016

No. of Mining inspectors 4 4 4.5 3.5 3.5 3.5 4.5 5.5

No. of MHF inspectors 1 1 1.5 1.5 1.5 1.5 1.5 1.5

Total 5 5 6 5 5 5 6 7

Table 2 Number of inspectors within OCIM

Again, as noted by Quinlan8 in his 2014 audit report‐Notwithstanding the closure of mining operations at Beaconsfield the current establishment of five inspectors is inadequate and as recommended by previous audits an additional inspector needs to be appointed with primary responsibility for quarrying.

Notwithstanding the findings and recommendations later in this report, I extend my full endorsement of Prof. Quinlan’s recommendation that there be 6 full time Mines inspectors working in the OCIM.

There are currently 1.5 personnel within the OCIM assigned accountabilities for Tasmania’s Major Hazard Facilities (MHFs). It is my view that such arrangements impose unnecessary financial inefficiencies on the OCIM and clouds the number of persons engaged in conducting activities as Mines inspectors. Taking into consideration the administrative and managerial resources required to support the regulation of MHFs, it could be argued that there are nominally only 5 inspectors working full time on regulating the mining and quarrying industries in Tasmania.

It is my understanding that a separate audit is underway into the effectiveness of the current approach to the regulation of MHFs. Without prejudicing the outcomes of that audit, it is my opinion that a clear separation is required between the personnel, their accountabilities, legislative frameworks and financial support between the regulation of mines, quarries and MHFs.

Table 3 details the Budgeted vs. Actual Expenditure for the OCIM (year‐on‐year) over the period 2009‐17. On average, 90% of the Budgeted and 85% of the Actual annual financial resources of the OCIM has been expensed on salaries.

7 Quinlan, Michael. Third Audit of the Mine Safety Unit and Office of Chief Inspector of Mines, WorkSafe Tasmania. 2014, page 51 8 Quinlan, Michael. Third Audit of the Mine Safety Unit and Office of Chief Inspector of Mines, WorkSafe Tasmania. 2014, page 51



Year Expense Budget Actual Expenditure % of Budget % of Actual

2009‐10 Salaries $828,851 $867,460 83% 81%

Non‐Salaries $172,212 $203,871 17% 19%

TOTAL $1,001,063 $1,071,331

2010‐11 Salaries $988,338 $912,157 86% 81%

Non‐Salaries $164,314 $214,561 14% 19%

TOTAL $1,152,652 $1,126,718

2011‐12 Salaries $1,059,077 $981,632 86% 83%

Non‐Salaries $173,045 $200,755 14% 17%

TOTAL $1,232,122 $1,182,237

2012‐13 Salaries $1,071,381 $1,153,646 93% 93%

Non‐Salaries $80,477 $82,573 7% 7%

TOTAL $1,151,858 $1,236,219

2013‐14 Salaries $979,308 $1,273,077 95% 87%

Non‐Salaries $47,139 $191,277 5% 13%

TOTAL $1,026,447 $1,464,354

2014‐15 Salaries $896,298 $682,853 94% 79%

Non‐Salaries $56,360 $181,990 6% 21%

TOTAL $952,658 $864,843

2015‐16 Salaries $1,029,995 $965,146 91% 87%

Non‐Salaries $98,360 $139,128 9% 13%

TOTAL $1,128,355 $1,104,274

2016‐ Jan17 Salaries $1,036,664 $623,737 90% 85%

Non‐Salaries $111,178 $107,314 10% 15%

TOTAL $1,147,842 $731,051

Average 90% 85%

Average 10% 15%

Table 3 OCIM Annual Budget vs. Actual Expenditure

Budget vs. Actual Expenditure $1,500,000

$1,400,000

$1,300,000

$1,200,000 Budget $1,100,000 Actual $1,000,000

$900,000

$800,000 2009‐10 2010‐11 2011‐12 2012‐13 2013‐14 2014‐15 2015‐16 2016‐17

Notwithstanding some anomalies in the mid‐years, the actual expenditures on salaries from 2009 through to 2016 has remained relatively unchanged at $1.1Million whereas the total number of inspectors (including MHFs) has increased from 5 to 7 (mines inspectors from 4 to 5). This has



resulted in the salary component of the budget increasing from 81% to 87% and the non‐salary component decreasing from 19% to 13%. The non‐salary component includes such items as ‐ training and professional development; travel and accommodation expenses (local and interstate); seminars and conferences; and technical and other consultancy fees.

If an erosion of the capability and capacity of the inspectorate is to be avoided, the funding available for attracting and retaining staff will require a predictable and sustainable base. The packages on offer, however, can include mechanisms other than remuneration that can prove attractive to skilled and qualified people. One such mechanism is a leading Professional Development scheme where people are encouraged to acquire new skills (particularly those being applied to Operational Risk Management and Critical Control Analysis), upgrade their current knowledge and broaden their experiences by working in other jurisdictions and learning from the practices and capabilities of their peers. This is further discussed in the section of this report dealing with Training and Capability.

State Directly Employed

No of Large Mines ¤

Total Small Mines & Quarries

No of Mine inspectors

Budget p/a $'000

Direct Employed per Mine Inspector

Large Mines per

Mine Inspector

Tas 4850 16 315 5.5 1100 882 2.9

NSW 38200 165 2590 72 34000 # 531 2.3

Qld 39797 132 1241 52 40000 * 765 2.5 # excludes Coal Mine Services unit ¤ definitions of “large” varies between states * includes Health Surveillance unit Table 4 Indicative Variables per Mines Inspector by State

In comparison to other jurisdictions, Table 4 provides some indicative variables by state. Within the limitations of the data9, it can be seen that, per mines inspector, the OCIM in Tasmania services an equivalent number of large mines, more direct employees and more large quarries than the jurisdictions Queensland or New South Wales with less budgeted expenditure.

The Tasmanian Government, in common with other local, state and federal authorities, is facing sustained pressure to cut costs and drive efficiencies still increase funding to areas of critical concern to the community – water and power security for example.

9 precise data across jurisdictions is, in some cases, difficult to access, incomplete, ambiguous and subject to differing definitions, inclusions and exclusions. In these instances, it has only been possible to provide indicative data


…levy…not opposed to it…how do we set the level ofit…understand the value…need to develop a BusinessCase…clear statements of Value vs. Costs…

…levy introduced through Minister…gave usindependence…gave us freedom to conductresearch…funded the Health Surveillance Unit…


Faced with these same competing interests, the regulators in both Queensland and New South Wales introduced a levy on the industry to fully fund the activities of the mines inspectorate.

In Queensland, the Mining and Other Legislation (Safety and Health Fee) Amendment Act 2008 received assent on 8 September 2008 to establish the Safety and Health Levy10 which funds the entirety of the safety and health services provided by the Queensland Government to the mining, quarrying, explosives and fireworks industries. The levy is reviewed annually and is based on the number of workers in the industry and the budgeted cost of its services. The number of workers is calculated from a census form provided by industry. The levy and census requirements apply to all operations regulated by the Coal Mining Safety and Health Act 1999, the Mining and Quarrying Safety and Health Act 1999 and the Explosives Act 1999. Fees and reporting requirements vary according to the number of workers or contractors at the operation (refer Table 5 below).

Mining and Quarrying Industries 5 Workers or less 6 to 10 Workers 11 Workers or more

Levy fee exempt $ 107.10 $ 850.00

Table 5 Queensland Safety and Health Levy

In New South Wales the Mine Safety (Cost Recovery) Act 2005 established the Mine and Petroleum Site Safety Fund, commonly referred to as the Mine Safety Levy11. The levy was introduced as one of the 31 Recommendations of the Wran Review into the safety of the New South Wales mining industry. It is charged by the NSW Government to pay for health and safety regulation of the state’s mining workplaces.

The levy applies to employers in the mining industry who have obligations under the mine safety legislation for the health and safety of workers. The levy is collected by the workers compensation insurers of mining industry employers and transferred to NSW Trade & Investment. The levy is

24 Mineral Council

26 …no objections to a levy that funds the inspectorate… Mineral Council OHS

84 …levy negotiated through the Mine Safety Advisory Council… NSW Regulator

93 QLD Regulator

112 …we must be able to buy experience and practical people from industry...

QLD Regulator

calculated as a percentage of worker’s wages. When determining the Mine Safety Levy, the department considers the planned mine safety program and related budget for the relevant period, any funds to be carried forward

10 visit https://www.business.qld.gov.au/industries/mining‐energy‐water/resources/safety‐health/mining/levy‐census 11 visit http://www.resourcesandenergy.nsw.gov.au/miners‐and‐explorers/safety‐and‐health/about‐us/mine‐safety‐levy


http://www.resourcesandenergy.nsw.gov.au/miners-and-explorers/safety-and-health/about-us/mine-safety-levyhttps://www.business.qld.gov.au/industries/mining-energy-water/resources/safety-health/mining/levy-census

…we have these current mechanisms in place…would needto seek the cooperation of the insurers...


from the current financial year and the residual balance of the mine safety fund. In 2015‐16, employers contributed $33.8million towards the fund.

The introduction a similar style to fund the operations of the OCIM was canvassed with a range of stakeholders during this audit. There was a programmatic recognition that if the regulator is to attract and retain qualified and experienced personnel, it would have to meet the market in attracting such people.

There were no vehement objections raised to the concept, however, it was recognised that the introduction of such a levy would require the development of a formal business case, consultation with the industry and mechanisms to avoid imposing undue financial burdens onto small operations.

It is not within the remit of this audit to reiterate the substantive arguments for and against the introduction of a mine safety levy, or to evaluate it against drawing a defined percentage of the royalties already paid by the industry. Such matters have been extensively canvassed by the 2004 Wran Review into the NSW Mining Industry and the 2008 Queensland Ombudsman Review of the Queensland Mines Inspectorate. It is relevant to this audit to note that these jurisdictions have now enjoyed the certainty and predictability of a secure and sustainable funding base for the regulation of their mining and resources industries for 9 and 12 years respectfully, paid for entirely by the industries they regulate.

140 Workers Comp Tas

141 …it is a very efficient model... NSW Regulator

The invoicing and collection of the levy through a system similar to that used in New South Wales would appear to be the most efficient. Comparable mechanisms are currently in place for the collection of the asbestos levy12 and would not require the introduction of new census regulation or impose additional regulatory burden on stakeholders.

It is my opinion, that the introduction of a levy to fund the activities of the OCIM is the single most effective method to provide an adequate, predictable and sustainable financial resource to maximise the impact of its activity. As such ‐

RECOMMENDATION 1 That a Safety and Occupational Health Levy be introduced as a matter of priority to fund the entirety of the activities of the OCIM. Such a levy to be calculated in consideration of the planned activities of the OCIM and struck against all mining and quarrying operations with safety and health obligations under the Mines Work Health and Safety (Supplementary Requirements) Act 2012. Consideration is to be afforded to smaller mines and quarries with less than a prescribed number of workers.

12 Asbestos Compensation Commissioner Asbestos Compensation in Tasmania – A Guide. Tasmanian Government. 2011, page 15


‐ ‐ ‐ ‐ ‐ ‐


1. (b) op ons for be er aligning financial resources with industry ac vity

There is no doubt that the mining and quarrying industries are cyclical. In the short‐term, smaller mines and quarries are often worked under campaigns of intense activity driven by short‐term markets, local demand or even weather conditions. In the longer term, market forces, commodity prices and the costs of capital all influence the risk appetites of potential investors and the production and employment levels in current operations. Aligning the financial resources of the OCIM, which in effect means the number of mines inspectors, to match these vagaries in the industry is problematic.

It is relevant to note that declining industry activity in terms of productivity and employment does not necessarily result in a decreased operational risk profile ‐ or in the number of interventions required by the regulator. As mines develop deeper, more challenging resources and work to tighter margins, the risks to safety and occupational health is often increased.

In terms of industry trends, definitive data has been difficult to source. Table 6 provides indicative totals of the numbers of persons employed in the mining and minerals processing sectors in Tasmania from 2003, through the Global Financial Crisis of 2008, the middle of the mining “boom” in 2014 and towards the end of the current down‐turn in 20116.

2003 04 2006 07 2009 10 2010 11 20014 15 2015 16

3548 3334 3411 3628 6300 4850

Table 6 Total Employment Tasmanian Mining and Mineral Processing

These figures show that, despite the cyclical nature of the mining and processing industries, there are currently more people employed in these industries than in 2010 ‐ the year of the first of these audits in which it was recommended ‐

That an additional inspector be appointed to the Office of Chief Inspector of Mines with primary responsibility for quarries … The increase in the establishment to six inspectors is consistent with recommendations made by the independent investigation into the death of Larry Knight … at the Beaconsfield Gold Mine on Anzac Day 200613.

As such, options for aligning the financial resources with industry activity should focus on the effective and efficient prioritisation of the activities of the inspectorate and ensuring the numbers of mines inspectors in the OCIM remains at six.

Consistent with other jurisdictions and its own practices, the development and application of risk‐based work programmes based on the hazard profiles and activities at the mines, quarries and Major Hazard Facilities (MHF) in each district is the appropriate methodology for aligning

13 Quinlan, Michael. First Audit of the Mine Safety Unit and Office of Chief Inspector of Mines, WorkSafe Tasmania. 2010, page 31



resources to industry activity. The type and number of these activities are examined in detail in the section of this report dealing with inspectorate Activities.

In order to provide transparency and accountability to the process, the OCIM should develop detailed OCIM Strategic and Operational Plans. These plans should have clear linkages to the broader WorkSafe Tasmania Strategic Plan and Business Plan and must report directly to those objectives.

The plans should detail the OCIM’s Functions and Objectives as well as its key Focus and High Priority Target issues. It should detail its scheduled planned activities, the resources allocated to these activities, the specific Impact each activity is targeting and the defined Risk Indicator by which such impact will be measured. More than just performance indicators, these impacts and indicator registers will provide the basis by which the OCIM can measure progress towards achieving the objectives of the Act and its own strategic and tactical goals.

The plan should be publically available and, in common with other jurisdictions, the OCIM should produce an annual performance report describing the activities undertaken by the OCIM during the period, the safety and health outcomes of the industry and the progress of the OCIM towards achieving its objectives.

These annual reports will provide – i. benchmarking data on the safety and health performance on the industry; ii. critical data on the effectiveness and efficiency of the OCIM activities in advancing this

performance; iii. support to the value‐adding proposition of the Safety and Occupational Health levy; and iv. open communication to all stakeholders on the scope and nature of the pro‐active and

reactive activities of the inspectorate, particularly in times of falling industry activity.

Jurisdictions in both Queensland and New South Wales develop key strategic and operational plans and report publically on both the performance of the industry and the performance of the inspectorate. As such ‐

RECOMMENDATION 2 The Office of Chief Inspector of Mines develop and publish detailed Strategic and Operational Plans, clearly linked to the broader WorkSafe Tasmania Strategic Plan. Such plans to contain detailed goals and high priority target areas together with specific impact and risk indicators against which performance can be measured. Further, the Office of Chief Inspector of Mines shall prepare an annual report on the safety and health performance of the industry, the performance of the OCIM against these plans and detailing the activities undertaken during the period. These plans and annual reports are to be made publically accessible.


* B.App.Sc. Mining Engineering* Mine Managers Certificate ofCompetency

* B.Sc. (Mining) Engineering(Hons)* B.Sc. (Geotechnical)Engineering (Hons)


1. (c) the remunera on qualifica ons and experience for staff of the OCIM 1. (d) arrangements for out‐of‐hours a endance by OCIM staff at major/fatal events 1. (e) improvements to Statement of Du es and the use of exis ng award structures for the OCIM

The current office bearers within the OCIM are detailed in Table 7 together with their qualifications and remuneration classification.

Position Award Classification Location Holds Incumbent Appointed to Current Position

Chief Inspector of Mines

Senior Executive Service

SES Hobart Fred Sears 16‐Apr‐07

Lead Safety Analyst‐Major Hazard Facilities

Tasmanian State Service Award

Professional Stream Band

Launceston * B.App. Sc (Chemistry) * Post Grad. Radiation Safety Officer

Ian Graham 2‐Aug‐02

Senior Inspector of Mines


Profession Stream Band

Hobart * Grad.Dip. Fire Engineering * Grad.Dip. Building Surveying

Mark Smith 18‐Dec‐03

Principal Mining Engineer

Senior Executive Service

SES Burnie * B.Eng (Mining) * 1st Class Mine Manager Certificate

Andrew Tunstall

23‐Apr‐08

Inspector Tasmanian State Service Award

General Stream Band

Hobart * Cert IV Government Fraud Control Investigations

Craig Sault 24‐Jan‐11



General Stream Band

Burnie * Master Degree Occupational and Environmental Safety & Health * Dip. Quality Auditing

Yvonne Veenendaal

13‐Apr‐15



Professional Stream Band

Burnie Willard Zirima

15‐Mar‐16

Table 7 Current Office Holders

With the notable exception of coal mining experience and qualifications, I believe the range of qualifications, skills and experience currently within the OCIM is adequate to enable it to conduct its activities. The lack of coal mining expertise has been the subject of this and previous audits and is considered in further detail the section of this report dealing with Professional Alignment, Training and Capability.



In terms of remuneration, there are ongoing anomalies within the office that are causing unnecessary tensions and that are at odds with the expressed values of WST14. These inconsistencies must be addressed in the interests of the long‐term sustainability of the office.

As detailed in Table 7, of the personnel within the OCIM – 1 is an SES Contract; 1 is a Contracted Position; 3 are classified as Professional Stream (different Bands); and 2 are classified as General Stream (different Bands).

Additionally, there are differing arrangements in place for personnel to attend call‐outs and ensuring after‐hour access to offices with emergency and investigation kits, vehicles (fitted with two‐way radios). There are disparities in remuneration between the senior ranks and there are anomalies in the designation of some people as General Stream while others in the same role are designated as Professional Stream. Some of these matters are impacting on morale, while others can reasonably be seen as impacting the ability of officers to perform their duties in the event of an emergency after‐hours call‐out.

It is to be noted that these issues are not unique to the OCIM in Tasmania. Both the Queensland and New South Wales mines inspectorates underwent significant structural changes following detailed reviews into their operations, including but not limited to the ‐

1 1996 Qld. Mining Wardens Inquiry Report on an Accident at Moura No 2 Underground Mine on 7 August 1994;

2 1997 NSW Mine Safety Review commissioned by the State Government; 3 2005 NSW Mine Safety Review by The Hon Neville Wran AC QC; and 4 2008 Regulation of Mine Safety in Queensland. A Review of the Queensland Mines

Inspectorate by the Queensland Ombudsman.

Resolution of these matters in the two jurisdictions was achieved through different means; however, both established a simplified, transparent and equitable structure reflective of the realities of salary and conditions available within the industry ‐ and indeed to mine inspectors in other jurisdictions.

The Queensland solution was to engage all personnel from the Chief Inspector to the Inspection Officers on individual contracts under Section 122 of the Queensland Public Service Act 2008. These Section 122 contracts are used to provide public service agencies with the flexibility to attract and/or retain officers with critical skills for specific business needs. They are written to reflect the remuneration and conditions required to attract the appropriate personnel and include all necessary clauses to remove any questions about call‐out provisions, vehicle access and matters of professional development. The Executive Director and Commissioner of Mine Safety

14 WorkSafe Tasmania. Strategic Plan 2013‐18, Values. May 2016, page 4



and Health are not appointed as inspectors under the legislation and remain members of the Senior Executive Service.

The New South Wales solution was to engage all personnel, other than the Executive Officers of the Department, under the specific Department of Industry Mine Safety Officers Award. This award includes defined provisions for call‐outs and emergency response that places all field officers into a call‐out roster at which time they are provided with open access to whatever physical resources they may, including vehicles. The remuneration scales within this award also reflect the conditions available within the industry and call‐out allowances are included. The Chief Compliance Officer, Director Mine Safety Operations, Chief Inspector of Mines, Manager of Regulatory Audit and Investigation Unit and the Director Mine Safety Performance remain members of the Senior Executive Service.

78 …we should be working across boundaries... NSW Regulator

89 …all inspectors are under specific award Dept. of Industry Mine Safety Officers Award...

NSW Regulator

97 …all inspectors are on…contracts…to make up the remuneration in order to attract people from industry...

QLD Regulator

It is my view that the use of Section 122 contracts, or the equivalent within the Tasmanian Public Service Act, provides a more flexible solution with less time and resources required for transition.

In consideration of the above matters ‐

RECOMMENDATION 3 All officers of the OCIM be transitioned to individual contracts whereby the remuneration, terms of engagement and other allowances (out‐of‐hours attendance, provision of vehicles, career paths and professional development) are simplified, transparent, equitable and reflective of salary and conditions available within the industry and to the mine inspectorates in other jurisdictions.

It is incumbent upon the officers of the OCIM to appreciate that the remuneration and conditions that are reflective of those available within the industry may well be higher than those of other officer holders within WST. As such, they must expect to be held to the highest performance standards and uphold the highest levels of professionalism and conduct. As a part of the greater community that is WorkSafe Tasmania, they must not hold any sense of entitlement and must, at all times, act to support, uphold and comply with the policies practices and procedures of WST .



Terms of Reference 2

2. REVIEW STRUCTURAL SUPPORT OF THE OCIM (a) the op misa on of current physical resources to administer the legisla on applicable to the OCIM

The most crucial structural support required by the OCIM is the legislation itself.

At the time of this audit, the legislation applicable to the OCIM includes – Work Health and Safety Act 2012; Work Health and Safety Regulations 2012; Mines Work Health and Safety (Supplementary Requirements) Act 2012; and Mines Work Health and Safety (Supplementary Requirements) Regulations 2012.

As part of the National WHS Harmonisation programme, in the years leading up to the introduction of these Acts and Regulations in Tasmania in 2013, Safe Work Australia worked with the National Mine Safety Framework (NMSF) to develop what came to be known as Chapter 10: WHS Mines Regulations. It was intended that these Mines Regulations would be included in the larger WHS Regulations in each state. However, when these draft model Mines Regulations were finalised, the necessary majority agreement of state and territory Ministers was not achieved – and hence Chapter 10 was not included in the model harmonised Work Health and Safety Regulations.

In September 2014, the draft model Mines Regulations were circulated to states and territories to consider them for implementation. South Australia and the Northern Territory have adopted mining regulations based on the draft model Mines Regulations. The NSW has mining regulations include the draft model Mines Regulations and other additional requirements. Victoria, Queensland, Western Australia retained their existing regulations for mine safety.

Tasmania also retained its existing regulation and has not, as yet, included the draft model Mines Regulations into its Mines Work Health and Safety (Supplementary Requirements) Regulations 2012.

This has resulted in significant gaps in the Tasmanian mining legislation that are not present in the legislation of other jurisdictions, an outcome at odds with the original intent of the harmonisation programme.

To address this matter, in April 2014, the Minister directed the Mine Safety Steering Committee to conduct a review of the Mines Work Health and Safety (Supplementary Requirements) Act 2012 and the Mines Work Health and Safety (Supplementary Requirements) Regulations 2012 with the objective of closing this gap.



It is worthy of note that Chapter 10 does not include any coal mining specific provisions, without which issues such as spontaneous combustion, respirable dust, fires and explosions, outbursts and inundations together with the provision of gas monitoring, ventilation, self‐escape, emergency response and strata control (to name but a few) remain unregulated.

As such, a sub‐committee has been established to review the regulatory requirements specific to coal mining. The Chief Inspector of Mines and the WST Director Policy have been heavily involved in these reviews and the development of these key pieces of legislation.

These are substantial tasks requiring significant allocations of time and resources. Having been personally immersed in the process of developing regulations, moving it through the parliamentary drafting office, the parliament itself and through the communication and transition stages, it is not unreasonable to suggest that an extensive administrative workload on the OCIM will be in place for at least the next 3years. The OCIM Strategic and Operational Plans should recognise that time spent on these critical tasks will diminish the available time the Chef Inspector can devote to field‐based activities, including the conduct of investigations, and to the coaching and mentoring of the inspectorate. As such ‐

RECOMMENDATION 4 Provision should be included in the OCIM budget to provide some full‐time administrative support to the OCIM and to engage short‐term external personnel to cover unanticipated short‐falls in the availability of the key OCIM personnel when required.

Mine Record and Enforcement Management To support the regulatory activities of the OCIM, an effective and intuitive electronic Mine Record Entry Management System can save time and effort in recording, tracing, monitoring and reporting of Incidents, Action Close‐Outs, Compliance History, Enforcement Actions and Inspector Activities.

144 …2 days field visits will take 2 1/2 days to do the Mine MREs and associated documents… Inspector

The OCIM uses a Records and Document Control system known as TRIM to capture, manage and provide access to records and information. While TRIM is designed for use in ‐

i. records management; ii. document management; iii. e‐mail management; iv. workflow/action tracking; v. image management; and vi. web publishing;

it has limitations in searching, tracking, reporting and displaying of real‐time dash‐boards and is subject to variations of input by users. I understand these issues are being reviewed by FYB Pty Ltd, a privately owned company that provides information technology services.



In the meantime, an offer has been put by the Director of Mine Safety Operations in New South Wales to provide the OCIM with secure access to its system known as ACES (Activities Compliance Enforcement System).

A brief overview of the capabilities of this system was provided during my time in their offices as part of this audit. I believe it would be worthwhile for an appropriate member of the OCIM to attend the offices of NSW Regulator and interrogate the functionality of this system. It is designed specifically for the purpose of supporting the activities of the mining and quarrying regulator and could, without prejudice, find application in the boarder Industry Safety inspectorate.

Data, Informa on and Intelligence recoding analysis and repor ng Throughout this audit, the difficulty in accessing any meaningful data on the safety and health performance on the industry has been confounding. The little data that is required to be reported to the OCIM (numbers of Lost Time Injuries and Total Hours Worked) is effectively meaningless and in some cases, the requirement to report is ignored.

It is perhaps the largest gap in the current tools available to the OCIM for targeting its activities and measuring its impacts.

The biggest impediment to implementing such a targeted inspection policy lies in the serious inadequacy of the available statistics and other performance indicators. It is only if the inspectorate can confidently identify those with the highest injury and disease rates or risk that it can selectively target "worst" mine sites and enterprises. However, as numerous commentators and reports have pointed out, neither lost time injury frequency rate (Hopkins 1995, 33‐35), nor the various workers compensation statistics, provide more than the crudest indication of actual injury rates …not be a helpful predictor of the likelihood of low frequency high consequence events such as the Moura or Gretley disasters. Only with adequate data collection and interpretation, can a targeted inspection program realise optimal results.15

Both jurisdictions in Queensland and New South Wales have legislative requirements for the industry to report defined high potential incidents (whether persons were injured or not), the number, nature and mechanism for all type of injuries (Medical Treatment, First Aid, Lost Time, Permanent Disability, Occupational Health and, of course, Fatalities). This information is crucial to the identification and understanding of emerging issues across the industry, for benchmarking the performance of the industry and in monitoring the impacts of the activities of the OCIM.

The type and frequency of the reporting of this information is embedded into the legislation and any failure to report accurate and timely information is regarded as a serious breach of the legislation with significant consequences.

15 Gunningham, Neil. Sinclair, Darren. Factors Impinging on the Effectiveness of the Mines Inspectorate. National Research Centre for OHS Regulation. Working Paper 54. June 2007.


http:results.15


The information collected is subject to detailed descriptive statistical analysis and the results are published annually. These annual reports provide comprehensive benchmarking data and are an invaluable source of data and information. A greater application of the tools of inferential statistics could provide useful information on colorations, causation and assist in identifying key leading indicators.

In recognition of the administrative burden regular reporting can impose, and the equally inefficient workload of collecting, transcribing and recording paper based reports, both jurisdictions have web‐based facilities for submitting this information. As such ‐

8 ...value in providing benchmarking data on all injuries…from all industries…

SSO Mine

10 ...there is great value in focusing on Lead Indicators and being pro‐active with it…

SSO Mine

14 ...value in providing benchmarking… SSO Mine

55 …we don’t keep good statistical data, or any data really..we still get forms faxed in and still not electronically entered...

Inspector

63 …we would see great value in bench‐marking data... MHF

77 ...centralised in July 2015, couldn't trend, couldn't make decisions that are proportionate…trend data that focusses activities…

NSW Regulator

82 …focus efforts through risk profiling, hazard loads, type of operation, number of visits required…

NSW Regulator

86 …have an intelligence unit that collects and analyses data, statistical analysis…

NSW Regulator

96 …we use the HPI data…develop risk profiles that lead into operating plans…

QLD Regulator

RECOMMENDATION 5 That amendments to the current legislation be introduced mandating the reporting of defined high potential incidents and all injury statistics on a monthly basis. This reporting to be done through a web‐based portal designed for the purpose. This information must be appropriately analysed and an annual report be compiled detailing the results of this analysis.

Minister Advisory Commi ee Both jurisdictions have in place a key advisory group charged with providing advice on safety and health issues to the Minister.

In Queensland, the Ministers Advisory Committee (MAC) is a tri‐partite body establishing to allow the mining industry, workers representatives and the regulator to participate in developing strategies for improving safety and health. Chaired by the Commissioner for Mine Safety and Health, its purpose is to give advice and make recommendations to the Minister about promoting and protecting the safety and health of persons at mines.

It periodically reviews the effectiveness of the Act and Regulations, the effectiveness of the control of risk to any person from mining operations, establishes the competencies qualifying a person to



perform tasks or duties under the legislation and considers the risk management performance of the industry.

The NSW Mine Safety Advisory Council (MSAC) provides the NSW Minister for Resources and Energy with advice on critical work, health and safety issues. The Minister refers these matters to MSAC for consideration and requests advice on appropriate ways to foster improved WHS performance in the mining and extractives industry. It reviews and analyses safety performance, sets strategic directions, provides advice and develops policy recommendations. It includes a secretariat within the structure of NSW Department of Industry that makes resources available, when appropriate through the department, on MSAC’s recommendation to explore issues and commission research.

MSAC includes an independent chairman and senior officials from the CFMEU (Mining and Energy Division), Australian Workers Union, NSW Minerals Council, Cement Concrete and Aggregates Australia and the NSW Department of Industry Resources Regulator. Two independent experts in work health and safety have also been members of MSAC since the 2006.

In would be appropriate and consistent for the Minister responsible for mining and quarrying in Tasmania to be offered this same avenue of advice from the key stakeholders in Tasmania’s most valuable export industry. As such ‐

RECOMMENDATION 6 That there be established under the legislation, a permanent Advisory Committee reporting to the Minister on the safety and healt

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